Buffett indicator today

Every page that puts this indicator beside a frightening forward number is fitting a line to the record and then reading it past the end of its own data. We are not going to do that. What the record supports is that the ratio has never been here, that the one time it got close the following decade lost money in real terms, and that a level has never been a timing signal on this series. The ratio has now spent 5 quarters above 200%, which is either a threshold breaking or a threshold that was never a threshold.

Is the Buffett indicator saying the market will crash?

No, and the record cannot say that either way at this level. There is not one finished ten-year window in 79 years that started anywhere near today's 255.7%. The highest starting point that has a completed decade behind it is 162.6% in Q1 2000, which is 93 points below where the ratio sits now, and that decade returned -2.79% a year in real terms. Everything above that line is extrapolation.

Buffett said above 200% is playing with fire. Is that still true?

He said it in 2001 about total market capitalisation over GNP, which is a wider measure than the one on this page, so his threshold does not transfer to this series directly. On this basis the ratio has been above 200% for 5 quarters and the market has not resolved it either way. A threshold that has been breached for years without consequence is either broken or is not a timing signal, and both readings are consistent with what is on this page.

Why does this use the Federal Reserve's data instead of the Wilshire 5000?

Because Wilshire withdrew its indices from FRED, so the usual version of this chart can no longer be rebuilt from a primary source without a paid data feed. A valuation chart nobody can check is not worth publishing. The Z.1 financial accounts go back to 1945, are revised in public on a published schedule, and anybody can pull the same series. The trade is that the Z.1 line excludes financial corporations, so the levels here sit below a whole-market version and Buffett's own thresholds do not apply to them.

Does GDP being quarterly matter?

Yes, and it is the most common place this calculation goes wrong. GDP is published as a seasonally adjusted annual rate, meaning what a full year at that quarter's pace would produce. Dividing a market capitalisation by one quarter's output instead reports a ratio four times too large, and roughly 1,000% still looks like a number somebody meant to publish.

How can the ratio go above 100%?

Easily, and it is not a paradox. The numerator is a stock, the accumulated market value of companies, and the denominator is a flow, one year of output. Nothing requires the value of assets to be smaller than a single year of production. The ratio is useful as a comparison against its own history rather than as a fraction that ought to stay under one.

What does the estimate at the top mean?

Both inputs are quarterly and published in arrears, so the newest measured reading is Q2 2026 and is 2 months old. The estimate rolls that quarter's market value forward by the +2.5% the S&P has moved since, over the same GDP figure. GDP is held flat because there is no monthly GDP to move it with, which biases the estimate upward while the economy grows. All three inputs are printed so you can redo it.